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I guess my brain is to feeble to wrap my head around tax legalese. Perhaps that's why the very best tax experts are in such high demand. I always suspected that it is written this way on purpose. It's job security for the talented.

The IRS message makes me think (hope) that they are examining their systems to see if they can fix these returns automatically and avoid the need for amendments. Will they do the same thing for the premium advance payments that now don't have to be repaid?

"The IRS strongly urges taxpayers not to file amended returns related to the new legislative provisions or take other unnecessary steps at this time. The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance." …

I haven't looked them up myself, but another forum said these calculations require the add-back: Taxable amount of social security Exclusion for US savings bond interest used for higher education Exclusion for employer-provided adoption assistance Limit on deductible IRA contributions by plan participants Limit on student loan interest deduction Limit on deduction for tuition and fees Limit on rental real estate exception to passive activity loss rules It might take a while for the software vendors to get all this right.

New Exclusion of up to $10,200 of Unemployment Compensation More In Forms and Instructions If your modified adjusted gross income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021, excludes from income up to $10,200 of unemployment compensation paid in 2020, which means you don’t have to pay tax on unemployment compensation of up to $10,200. If you are married, each spouse receiving unemployment compensation doesn’t have to pay tax on unemployment compensation of up to $10,200. Amounts over $10,200 for each individual are still taxable. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation. The exclusion should be reported separately from your unemployment compensation. See the updated instructions and the Unemployment Compensation Exclusion Worksheet to figure your exclusion and the amount to enter on Schedule 1, lines 7 and 8. The instructions for Schedule 1 (Form 1040), line 7, Unemployment Compensation, are updated to read as follows. Line 7 Unemployment Compensation You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you in 2020. Report this amount on line 7. Caution. If the amount reported in box 1 of your Form(s) 1099-G is incorrect, report on line 7 only the actual amount of unemployment compensation paid to you in 2020. Note. If your modified adjusted income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021 excludes from income up to $10,200 of unemployment compensation paid to you in 2020. For married taxpayers, you and your spouse can each exclude up to $10,200 of unemployment compensation. For example, if you were paid $20,000 of unemployment compensation and your spouse was paid $5,000, report $25,000 on line 7 and report $15,200 on line 8 as a negative amount (in parentheses). The $15,200 excluded from income is $10,200 for you and all of the $5,000 paid to your spouse. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation. Use the Unemployment Compensation Exclusion Worksheet to figure your modified AGI and the amount you can exclude. If you made contributions to a governmental unemployment compensation program or to a governmental paid family leave program and you aren't itemizing deductions, reduce the amount you report on line 7 by those contributions. If you are itemizing deductions, see the instructions on Form 1099-G. Caution. Your state may issue separate Forms 1099-G for unemployment compensation received from the state and the additional $600 a week federal unemployment compensation related to coronavirus relief. Include all unemployment compensation received on line 7. If you received an overpayment of unemployment compensation in 2020 and you repaid any of it in 2020, subtract the amount you repaid from the total amount you received. Enter the result on line 7. Also enter “Repaid” and the amount you repaid on the dotted line next to line 7. If, in 2020, you repaid more than $3,000 of unemployment compensation that you included in gross income in an earlier year, see Repayments in Pub. 525 for details on how to report the payment. Tip. If you received unemployment compensation in 2020, your state may issue an electronic Form 1099-G instead of it being mailed to you. Check your state's unemployment compensation website for more information. Unemployment Compensation Exclusion Worksheet – Schedule 1, Line 8 Enter the total of lines 1 through 7 of Form 1040 and Schedule 1, lines 1 through 7. Include the full amount of unemployment compensation you received in 2020 on Schedule 1, line 7. Use the line 8 instructions to determine the amount to include on Schedule 1, line 8 and enter here. Do not reduce this amount by the amount of unemployment compensation you may be able to exclude. Add lines 1 and 2. Enter the total of line 10b of Form 1040 and Schedule 1, lines 10 through 21. Subtract line 4 from line 3. This is your modified adjusted gross income. Is the amount on line 5 $150,000 or more? [ ]Yes. Stop You can’t exclude any of your employment compensation [ ]No. Go to line 7 Enter the amount of unemployment compensation paid to you in 2020. Don’t enter more than $10,200 If married filing jointly, enter the amount of unemployment compensation paid to your spouse in 2020. Don’t enter more than $10,200 Add lines 7 and 8 and enter the amount here. This is the amount of unemployment compensation excluded from your income. Subtract line 9 from line 2 and enter the amount on Schedule 1, line 8. If the result is less than zero, enter it in parentheses. On the dotted line next to Schedule 1, line 8, enter “UCE” and show the amount of unemployment compensation exclusion in parentheses on the dotted line. Complete the rest of Schedule 1 and Form 1040, 1040-SR, or 1040-NR. Page Last Reviewed or Updated: 12-Mar-2021

There is supposed to be a worksheet created that will start with the amount received that will calculate the nontaxable and taxable portions, so I think we will enter the amounts shown on the 1099G for gross unemployment and tax withheld and let the software go through its calcuations. This is one more reason to wait for the software update besides the fact that the nontaxable portion will be an add-back for other calculations on the return.

True, but EIC is limited by BOTH earned income and AGI, so if unemployment increased the AGI above the cutoff, they may now qualify for more EIC.

The 1729 number is the TIN of the IRA. As the other posts state, this doesn't go on your client's return. Ignoring that, if it was your client's and not his IRA's, being a limited partner, this would be a passive loss and only deductible against passive income.

How do you make that work? Do you have to set up your openings in advance so they know when they are open? How much work is it to manage this. I use square for my electronic payments so I am assuming I could just add on that service? Thanks for any time you could spare educating me about this. Tom Modesto, CA

Correct. Separation of service is the requirement. It could be that you got fired, laid off, or simply that you quit. Make sure you have the date of birth correctly. You don't pay penalty if you become 55 in the year you take out the money. So if you are going to be 55 on December 31, 2021, you can take out the money now and qualify.

But if it lowers your income, it will make qualify for EIC either with the earned income you have for 2020 or with what EI you had in 2019.

Unemployment benefits are not earned income so the exclusion has no effect on earned income.

If unemployment reduces the salary and now some people will qualify for EIC, I doubt the IRS will do anything and we will have to amend.

For matching proposes, you should get the W-2Gs from your client. Not everything on the casino report has a W-2G. So it is on the best interest of the tax payer to list them. By the way, start a new topic vs hijacking someone else's post with different topics.

Send it to whoever files the Plan's tax return.

Possi & and Tom, you have a very sick sense of humor

Yes....it would....and it would break them. I for one would like to see it happen. Tom Modesto, CA

In fact, you get three bites at the apple (if you haven't yet filed for 2020). "As rapidly as possible," the IRS will send payments to those who qualify based on the 2019 return (if 2020 not yet filed). Later this year, the IRS will send payments based on the 2020 return (if 2020 filed by then) - you will get the difference if you were paid in the first round and are now eligible for more. Next year, you can claim RRC based on your 2021 income if eligible for more then. So, wait to file if you qualify for more based on 2019 return.

Can we efile today? I am glad the deduction is $10,200 for each spouse.

https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemployment-compensation?fbclid=IwAR2PO_Zfyso02H3SQA6JTAgwkLTUU-Zmv26YdgxtbYg9UcOZNQoLnXkfWWM

I'll second the need for the support worksheet. Also, keep in mind that student loans used to pay college expenses that the student is obligated to repay are considered to be support provided by the student.